Money2020_2016_special

Special Money 20/20 Issue | 2016
PCM
YOUR GATEWAY TO THE WORLD OF PAYMENTS
Big Data in Payments
The Game Changer

Welcome to the Money 20/20 special
October 2016
PCM is published by Payments & Cards
Network - payentsandcardsnetwork.com
© Payments & Cards Network 2016
All rights reserved. The views expressed by
contributors and correspondents are their
own. Reproduction in whole or in part without
written permission is strictly prohibited.
For further information on PCM, please email
amir@paymentsandcardsnetwork.com
“The Data Science sector is multifaceted, with fraud and security
being a large part of it on one side, and the optimisation of payment
processing on the other side”. Nathan Trousdell, Director Strategy
& Corporate Development @Payvision provides an insight into the
role(s) of Data when it comes to the Payments & FinTech space and
how can companies best utilise it to their best interest in our Expert
Interview.
Discover with Edoardo Fiorentini, Risk Manager @Magento “the next big thing” in fi ghting
fraud and reducing risk as part of our Thought Leaders corner. Moreover, Paul Weiss,
Junior Management Consultant, Financial Services @AccentureNL gives an overview
of the next long awaited major project SEPA Instant Payments: plug & p(l)ay. Last but
not least, Isaac Gurary, Co-Founder @NoFraud demonstrates the most effective ways
for SMBs to prevent fraud.
Startup spotlight this issue featuring PayStand. We sat down with Jeremy Almond,
Founder & CEO who gave us a better understanding of PayStand, how it came to live
and what makes it different than other providers in the industry.
In this issue we also accommodate a special feature on POUR. POUR is a new initiative
aiming to revolutionise the marketing industry. Nowadays, with ad-blockers and
millions of ads displayed in front of users wherever they go, how do you make your
advertisement stand out? How do you make sure the message is sent the right way? We
sat down together with Jordan Lawrence, Co-Founder & CCO @POUR who gave us a
better understanding of the capabilities of the new app and how this idea came to be.
For any questions, suggestions, or concerns, please address them to the editors:
Amir Abdin - amir@paymentsandcardsnetwork.com
Duc Dang - duc@paymentsandcardsnetwork.com
The Payments & Cards Network team wishes you good reading!

Contents
thoughtleaders
spotlight
4
18
7
STORIES
13
4
SEPA Payments: Plug and P(l)ay
Paul Weiss, Junior Management Consultant, Financial Services
@AccentureNL, dives with us into the new world of instant
payments.
13
Expert Interview: How Data is
transforming Payments
Nathan Trousdell elucidates the increasing importance of data
in the world of payments.
7
The next big thing...
Edoardo Fiorentini, Risk Manager @ Magento, gives us a heads
up on crucial aspects at fraud battlefront of the future.
18
Spotlight: Paystand
We talked to the makers of the payment-as-a-service platform.
10
Effective fraud prevention for SMBs
Isaac Gurary, Co-Founder @NoFraud presents viable fraud
prevention stategies for businesses without a dedicated fraud
& risk management workforce at hand.
21
Special Feature: POURapp
We speak to Jordan Lawrence, Co-Founder & CCO @POUR,
who gave us a deep insight into the capabilities of POUR and
how it is going to revolutionise the marketing industry.

Thought Leaders Corner
by Paul Weiss
SEPA Instant Payments: plug and p(l)ay
SEPA has long dominated the
fi nancial industry, but Europe’s
next major payment project is
just around the corner. Instant
payments are gaining ground, driven
by consumer demand for speed and
convenience. Leading the field here are
the European Central Bank (ECB) and
the European Retail Payments Board
(ERPB), that are driving the development
of the real-time payment system SEPA
Instant Credit Transfer Scheme (SCT Inst
scheme). The creation of the SCT Inst
scheme solution is the first in the world
to be interoperable in a region as large
as SEPA. Crossing borders, both literally
and figuratively.
The key difference between real-time
payments and traditional payment
models is that real-time payments
guarantees instant availability of funds
to the beneficiary of the transaction. In
contrast, real-time authorization of a
transaction on a card is not the same;
the buyer is committed to pay and the
recipient is guaranteed to eventually
receive the funds, but the availability of
funds is not instant.
Instant payments: the new normal
The digitalization of our economy,
with the spread of smartphones and
electronic commerce, entails a general
acceleration of payments. On the one
hand, new technologies lead to changes
in customer habits, allowing for Internet
purchases anywhere and at any time
(including during evening hours,
weekends and holidays). Customers
also expect to pay for and receive
their purchases as fast as possible.
Suppliers, on the other hand, wish to
have the certainty to be paid as soon as
they release their goods and services.
New technologies stimulate innovation
in payments and contribute to the
expectation for instant payments.
It is time for a paradigm shift in payment
processing. SEPA and the first Payments
Services Directive (PSD1) have already
reduced money transfer times (at least
within the European economic area) to
one business day, but that is still a long
way from real time. Instant payments
are set to change that. Instead of being
performed once a day, payments are
performed in real time.
Instant payments, and specifically a pan
European solution, will put tremendous
pressure on traditional card volumes,
which were in essence the only near real
time transaction available in the market
for a long time. Also, the impact of
instant payments shouldn’t be looked at
in isolation. Open API banking – pushed
by PSD2, growth of e/m-commerce in EU
and smartphone, internet penetration –
will provide a big thrust to the uptake of
instant payments in the market.
Anytime, anywhere and any channel
in Europe
The time has never been better to adhere
to an effective euro instant payment
scheme as several European Union
countries at the forefront of payment
technologies have already launched their
own solutions. Examples include Spain,
the Netherlands, Germany and Belgium
– which is not surprising given that
approximately 95% of payments in such
countries are purely domestic. However,
setting up parallel systems does not
necessarily appear to be the most
efficient way forward and is somewhat in
contradiction to the achievements made
through the Single Euro Payments Area.
A pan-European, interoperable scheme
will avoid fragmentation and encourage
the harmonization of euro payments
across the continent – a harmony that
the European PSP community has been
working hard and successfully to instill
in recent years.

Thought Leaders Corner
The ERPB has invited the European
Payments Council (EPC) 1 to create a pan-
European instant payment solution for
all payment service providers in Europe.
EPC says the proposed scheme is the
“fi rst in the world
to be interoperable
in a region as
large as SEPA
and is a response
to European
c u s t o m e r
needs for faster
payments”. It adds
that it will be a
“turning point
in making pan-
European instant
credit transfers in
euro a reality”.
future, banks must shift their entire
product and service mindset towards
instant delivery, both of payments and
also all other banking related offerings.
prominent example among decentralized
peer-to-peer networks using blockchain
technology to transfer funds. Although
still in its infancy, blockchain technology
might revolutionize the financial
industry.
Thus, the question
remains: how viable is
the business model of
the traditional bank?
Banks should not
maintain the status quo
and hope the fintech
storm will pass. Rather,
business models should
be re-designed and
transformed, allowing
banks to ride the fintech
wave.
Real time gets
real
Following the three-month public
consultation on the SCT Inst scheme
(April – July 2016), the EPC will review all
comments, in close collaboration with
stakeholder representatives. The target
date for the publication of the SCT Inst
scheme is next month. The scheme
would enter into force in November
2017, to leave enough time for scheme
participants to implement the necessary
changes in their organizations. The
short period between the publication
of the scheme and the fi rst SCT Inst
transactions demonstrates the payment
industry’s confidence in PSPs to adapt
well to customers’ needs, and quickly
implement major changes.
Source: Fyer EPC | The SEPA Instant Credit Transfer Scheme in a Nutshell
Banks engaging in
payments services will have to upgrade
or substitute existing infrastructure in
order to offer instant payment services.
Given the low profitability of the banking
sector in the light of the low interest
rate environment, heavy investment
in revamping infrastructure may be
challenging.
At the same time, focusing investment
on a centralized instant payment
services system may not be the right
move as technology continues to evolve.
Blockchain technology, a decentralized
payment network, also offers a way to
pay in real time, without the need of
an intermediary. Bitcoin is the most
Bank’s strategy: Need
for Speed
Establishing an IP capability can be
challenging for banks, requiring a
redesign of internal processes and an
alteration of current batch-payment
operations. Underlying payments
technologies and central infrastructures
also need modernizing. To realize the
opportunities that instant payments
opens up, banks need to take a proactive
and holistic approach to the transition.
This involves four key steps:
1. Formulate the vision and strategy
for real-time payments early, setting
out the vision, strategy and value
proposition for shifting the bank
from a 30-year-old legacy payments
Payments as a threat to banks’
business models
Arguably the most fundamental change
required by the advent of instant
payments is a shift of service mindset
for banks. Real-time payments is a key
component of the everyday bank, which
takes a central role in its customers’
everyday lives. This is because a real-time
payments capability is a vital enabler
for the real-time banking products and
services – instantaneous, always-on,
always-available via any device – that
banks customers are now demanding.
So, to retain and win customers in the

Thought Leaders Corner
model to a 24x7x365 payments
model. The bank can then defi ne
their scope for turning its vision
into reality, including product types,
geographies, channels and clients
2. Take a hard look at the implications
and opportunities around products
and customers, including how
increasing adoption of instant
payments will impact existing
payment types and revenue
streams
3. Revisit platforms and system
components, to pinpoint areas
where significant modernization
is needed to enable real-time
processing and ensure continuous
availability
4. Implement organizational redesign
of the bank’s payments value chain,
ranging from customer service
to fraud operations and intraday
liquidity management
Accenture has created a digital IT
blueprint for the everyday bank,
mapping out how banks worldwide
can leverage digital technologies to
take a central role in their customers’
lives. Instant Payments – the real-time
transfer and availability of funds 24x7 –
is a key element of this blueprint for the
future of banking, enabling financial and
non-financial activities to be undertaken
for customers in real-time at any time of
day or night.
Everyone wants everything instantly!
The market is sending a clear message:
consumers, businesses and regulators
want fast, seamless payment services
that are available all the time,
everywhere, from any device. Instant
payments contribute to more than just
customer satisfaction. Instant payment
solutions allow the development of new
high-value services within and beyond
payments. With challenges across the
board, banks will have their work cut out
for them to keep up with the changing
world of payments in 2016. It is shaping
up to be a pivotal year for the payments
industry as regulation, new technology
and security issues combine to reshape
the landscape. Financial institutions
need to ensure they capitalize on
opportunities before it is too late.
Paul Weiss
Paul Weiss works within Accenture’s
Management Consulting Practice,
Industry Financial Services, based
out of the Netherlands specialized in
payments and digital banking. Paul
has worked with several financial
institutions to assist them in defining
their business and technology strategy
and then playing a role executing and
delivering against that strategy.
Accenture
Accenture is a leading global professional services company, providing a broad range of services
and solutions in strategy, consulting, digital, technology and operations. Accenture has extensive
experience in payments, Everyday Banking, open APIs and digital banking strategies - and can help
organizations to navigate the optimal route along this journey.

Thought Leaders Corner
by Edoardo Fiorentini
I
know that fraudsters don’t sleep. Well,
of course they do, but most likely in
different time zones and we all know
what they do… to us. But what are
they doing when they are not placing
fraudulent orders?
Forget the naïve idea of a guy with a
mask, sitting in his mother’s basement
with dimmed lights. Good fraudsters
are highly educated people who, for one
reason or another, fall into the illegal
practice of attempting online fraud.
These people study, group together and
share lots of information as well as tips
and tricks for their fraudulent schemes.
It is our duty as fraud prevention / risk
management experts to keep tracking
their MO and see how it changes. While
these guys can afford to sleep, we can’t.
And it’s not only because we need to
prevent and manage fraud, it’s also
because a slight increase of chargebacks
won’t cause you a big headache, in the
short run. Exactly this-- In the short
term, you could potentially keep doing
things as you have been doing in the
past. But what will happen tomorrow?
The Next Big Thing...
When fraudsters inevitably attempt
what you hadn’t already thought of, how
fast will you react?
There is no valid answer. Each vertical
and region will behave differently, but
we need to keep studying fraudsters
and finding out what tools are available
now on the market.
So “what is the next big thing?” you
might ask yourself. But you are wrong
to ask! First of all, you should already
know. You should have a roadmap
consisting of business cases that will
justify implementing additional tools
and functions to your order processing
at one point in time or, better, at what
volumes we should start doing X or we
should stop doing Y.
This should be clear to you. If you
don’t have a Machine Learning tool,
when would it make sense for you to
implement it?
Remember that you need to make these
changes before fraud hits you badly.
Doing them after would be like closing
the gates when the horses already left.
I mentioned earlier that your question
was wrong. Of course, I’m trying to
provoke a reaction in you. There
is nothing bad in implementing an
additional API call to external sources
(credit card / email / IP and anything
else that is currently provided on the
market). Actually, in my opinion, you
need these implementations to happen
quite soon.
So “what’s next?” This is the point. What’s
next? Have you asked a fraudster?
Assuming you caught one, I wouldn’t ask
him. By catching him, you immediately
know he’s not the type of fraudster who
could tell you.
Doing your homework by infiltrating
their forums (and shops) would certainly
benefit you, but there’s no doubt that
you will just scratch the surface of the
problem.
When the industry comes up with
something new, you already know that
it will mean your conversion rate may
suffer. Only the headache of having

Thought Leaders Corner
to justify your numbers toward some
screaming account managers or
marketing people is enough to ensure
that you will consider new tools with
higher scrutiny and doubt yourself
before actually hitting the “On” button.
So, what is left to do?
Calm down, I don’t want to scare you.
Well, I did, but just a little bit. Every
fraud manager should always be a little
scared. We manage risk. We know the
consequences of getting hit where we
wouldn’t expect. We know the financial
losses may get us fired. But this fear is
vital to keep us pushing to fine tune our
rules, analyze more data and keep a
safe profile as often as possible.
What you could do is look for smarter
ways of doing your job. And the smarter
ways are actually not only extremely
beneficial for the data, but most of the
time, also cheaper than the current
solution.
There are tons of possible examples.
Let’s start from the end: Chargebacks.
I hope you manage those. Outsourcing
this task could seem like a valid move
initially, but you will lose grip on why
your buyers are spending time filling
out the required paperwork to start a
chargeback. Keeping it all in-house will
soon prove to you that there are some
fraudulent chargebacks that you will
lose 100% of the time.
So, how about sending the complex
chargebacks (or the un-winnable ones)
to an external company?
The same goes for data enrichment
providers: Of course you could send your
whole data to an address verification
provider. Or you could search manually
(only for the outsourced orders) with
lower fees. But what about skipping the
returning good customers completely
(and the returning fraudsters!) and
refraining from sending them to the
manual review population?
But then, there are other tools that
you could actually use for overall
conversion optimization. There is a lot
of talk around behavioral analysis for
risk management, but what about prerisk
or other areas? I mean, you have a
whole marketing department spending
millions to attract visitors and SEO
experts working in a close loop with
Social Networks experts to provide
aimed campaigns. Finally, they manage
to bring new potential customers to
your website, but you don’t analyze and
use this data? Of course, it is a great
idea to track all of this traffic, it is even
better to prepare different scenarios to
facilitate conversion.
Here goes another example: Marketing
spent money to engage with the
existing email database of previously
seen customers. Are they removing the
fraudulent guys you already spotted in
the past or are they sending advertising
emails to them too? And what about the
“returning customer”…? Are you offering
him, as first choice, his previously used
payment sub tender as the preferred
one? Are you using the available
information to enhance and facilitate his
checkout experience? When you detect
that the customer is using a Dutch
keyboard, Dutch IP address, Dutch
operating system… on a non-Dutch
store… would you offer him use of some
Dutch-specific payment method (read:
iDeal)?
But let’s get there gradually:
On most of the store sites where I shop,
I need to select from a drop-down menu
if I’m using an Amex, Visa, Mastercard
or whatever card. Why? Do you really
think you need more than 1 hour of
development to automatically figure out
what card your customer is using (via
the bin digits)?
So here is my take: the next big thing is
not a single “new” item on our list. Maybe
it is a combination of an optimized
Edoardo Fiorentini
Risk Manager at Magento
Edoardo “Edo” Fiorentini is currently the
Risk Manager of Magento Commerce,
co-chair of the Fraud Committee and
European Advisory Board of directors
of the MRC (Merchant Risk Council). He
describes himself to be a passionate risk
professional with years of experience
with CNP transactions. Edo has been
fully dedicated into achieving and
maintaining the difficult balance between
fraud management and conversions in
e-commerce.
series of different tools that will be used
on demand.
Efficiently Using external resources is
no secret at all. In fact, there are many
risk platforms that have the capability
of pinging providers when a set of
conditions is met. This of course reduces
costs and increases the accuracy of the
final scoring (and action) of an order.
But then again, this is not “new” stuff.

Thought Leaders Corner
“Harmonize different tools to improve
efficiency and cut on some costs” …. I
think I’ve heard this before. Even before
the PC master race or the spread of
internet. This won’t be a new invention.
We don’t need to re-invent the wheel.
But we should welcome the genius who
decided to put some rubber around the
rim.
So, what’s the next big thing?
If you reached this point in the article,
you may guess where I’m going: back to
basics.
The next big thing is the human brain.
Human logic. And while multi-billion
dollar companies are heavily investing
into the future, we need to manage risk
today. And the closest thing we have to
the future is a human brain.
Your data/risk analyst people are the
best source of hypotheses, analysis, rule
optimization, external sources checks
and so forth. These are the people you
can talk to. These are the professionals
who will read the news, interface with
peers in the industry, update their
knowledge by attending conferences
and webinars and so on.
Also, a good analyst will be thinking out
of the box with a smart attitude towards
challenges. A machine cannot do this,
yet. A clever professional analyzing your
data could focus on the low hanging fruit
in fixing and optimizing your resources.
She or he will also provide feedback to
the manual reviewers and customer
support agents, while also gathering
back some precious insights on the real
work and having the opportunity to not
only improve the system to save costs
and losses, but also to improve the
overall customer experience during the
journey of a purchase on the web.
Don’t be cheap. Get the best analyst you
can get your hands on and keep them
happy. Give them as much freedom as
possible to experiment, make changes
and develop new tools. Remember, they
are the professional who manages the
imperfect system that prevents fraud on
your store. But they are also the same
professional who will minimize the
insult rate of incorrectly rejected good
customers.
Magento
A powerful and unrivaled commerce platform, Magento Enterprise Edition is designed to empower
merchants to rapidly innovate and deliver engaging experiences to customers across all channels and
devices. The platform delivers rich, out-of-the-box functionality, enterprise performance and scale, and
seamless integrations with third-party solutions to keep you ahead of increasingly complex commerce
operations, and growing customer demands.

Thought Leaders Corner
Effective Fraud Prevention for SMBs
by Isaac Gurary
When most people think of online credit card fraud,
they imagine fraudsters targeting popular websites
such as Tiffany’s, Amazon or Macy’s. While large
businesses are most certainly targets for fraud,
most have sophisticated in-house fraud departments that
exclusively deal with fraud prevention. Those fraud prevention
departments are generally well staffed with experts that have
access to sophisticated fraud detection technology.
When it comes to small to mid-sized businesses, most are not
able to afford to employ such personnel and fraud prevention is
often delegated to customer service reps, warehouse managers
or simply anyone that happens to have a few extra hours that
can manually review certain orders.
The latest LexisNexis True Cost of Fraud Report (2016) states that
the average small to mid-sized eCommerce business receives
353 fraud attempts monthly, of which 114 are successful. This
obviously comes at great cost to eCommerce merchants, so
many have implemented basic fraud prevention strategies to
help mitigate this risk.
What are some of these strategies that SMBs are currently using
for fraud prevention?
1. Usage of Gateway Fraud Filters: Most Gateways allow
the eCommerce merchant to set up some basic rules to
block transactions that may be fraudulent. An example of
that is when there is an AVS mismatch they can decline the
transaction. This is generally the first line of defense used
by SMBs and can work decently for businesses that are
not high fraud targets. This is not a great solution for most
eCommerce businesses as the selection of available rules
is pretty sparse and the available rule set capabilities are
not very flexible, leading to a higher rate of false positives
(blocking a legitimate transaction due to overzealous fraud
prevention efforts). The technology utilized is also pretty
basic so the potential to block all fraudulent transactions is
limited as well.
2. Manual Review: Many eCommerce merchants will have
employees that will review purchases over a certain
dollar amount to confirm their legitimacy. Currently, the
average eCommerce merchant manually reviews 26%
of all transactions*. The manual reviews typically involve
using search engines such as Google to find any mentions
of the purchaser’s name or other credentials, tracking
the purchaser’s social media accounts, and using online
maps, often with street views to make a best estimate if
transaction on their website was made by the cardholder.
While this is a definitely improvement for using gateway
filters exclusively and manually reviewing orders does catch
a lot of obvious fraud, there are still quite a few downsides
to this method:
a
The employee(s) doing the manual review would need to be
up to date with all the latest fraud tactics - any knowledge
gap can be very costly.

Thought Leaders Corner
b
Manual review costs money in employee time & error.
c
The fraud prevention resources that are available to
the employees doing the reviews are quite limited and
the methods are unscientific. You will often hear such
employees say how they rely on their “gut feeling”as
opposed to relying on concrete data and statistics.
3. Third party fraud prevention solutions - There are many
firms that offer technological solutions to help mitigate
fraud risk. They generally fall into three categories:
a
b
Scoring model/Scoring & Tool model: These solutions
leverage multiple third party fraud prevention databases
and use the data to provide a risk score, which is the
likelihood that a transaction is fraudulent. Some of those
tools go further and provide tools to create logic on how
to interpret the score. These solutions are a boon to SMBs
as the available resources for fraud detection are greatly
enhanced. However, eCommerce businesses still need
to do a significant amount of manual review for those
transactions that are not obviously legitimate or fraudulent.
Additionally, creating rules can be extremely complex for
an employee that is not a fraud expert. Moreover, if the
employee that built the fraud rules leaves the company,
there is a very long learning curve for the replacement to
get up to date and understand the logic of the rule set.
Many such systems also require an upfront fee in services,
which can be costly for a small merchant.
Fraud Prevention Solutions that offer Insurance on
their decision: These solutions are fairly new to the market
(2-3 years) but have been growing quickly in popularity.
ECommerce merchants send all their transaction data to
the insurance solution and will be provided with a yes/
no response on the transaction’s legitimacy. If the order
that was passed as legitimate ends up resulting in a fraud
chargeback, the insurance company will cover the full cost
of the chargeback. These solutions are ideal for merchants
that do not want to have the responsibility of dealing with
any fraud related tasks. However, this peace of mind comes
at a big cost:
i. These solutions are very pricey and typically cost between
1% - 4% of gross revenues
ii.
iii.
c
Isaac Gurary
Co-founder, NoFraud
As president of MaidenLane Jewelry, Isaac Gurary understood
the challenges his customers were facing battling fraud. With
his partner, he founded NoFraud and successfully built a
solution that fused every fraud prevention technology with
human intelligence to eliminate fraud without erroneously
blocking legitimate transactions.
The contract terms for these solutions are often long and
set up fees can get expensive
The false positive rate(blocking legitimate transactions) rate
is often higher as the company protects itself against paying
out claims.
Hybrid Solution: merging the strengths of the existing
fraud prevention options is a hybrid solution. The solution
charges a fee per transaction (like the tool models) and is
a full service solution (similar to the insurance models) and
works in real time so no fraud expertise is needed from
the eCommerce merchant and no fraud prevention work
is needed on the part of the merchant either. An optional
Chargeback protection is available as well that can be turned
on or off at will without any long term commitment which
can be helpful for those that are risk averse. Affordable and
once set up, friction free, this is a great option for SMBs.
NoFraud is an example of such a solution.
How does an SMB choose the most fitting fraud prevention
solution?
As there are so many options for eCommerce SMBs to mitigate
their fraud risk, what can be helpful is for the merchant to ask
themselves the following questions:

Thought Leaders Corner
1. Does the product I am selling have a high resale value?
Most fraudsters are not after the actual product they steal
and will often will resell the stolen goods for cash. If you
are selling products with a high resale value then you are
a high target. High fraud categories include jewelry, brand
name watches, electronics, auto parts, branded clothing.
However, many businesses that are not in any of those
categories will still find themselves targeted so even a
merchant that sells items with low resale value should still
be aware of the existing risks of fraud.
2. Do I have a past history of fraud? Fraudsters are people
with human motivations. Once a fraudulent order gets
shipped from your website, you are automatically a higher
target as the fraudster realizes that your fraud screening
is not up to par and will keep trying to evade your fraud
prevention efforts. It can often take years before fraudster
gives up on targeting your website.
4. How risk averse am I? What resources do I have
available? For those that want to spend a preset amount
of fraud and/or do not have the resources to build and
maintain a fraud prevention rule set and conduct manual
review, the Insurance model or Chargeback protection
model via the hybrid solution may be the way to go.
Whatever the solution the eCommerce merchant will choose,
fraud prevention is a growing threat to SMBs. Thankfully there
are a plethora of options available to the small and mid-sized
businesses so those that choose a product that is well tailored
to their level of fraud risk/available resources/technological
integration, this threat can be kept under control.
*LexisNexis True Cost of Fraud study 2015
3. What eCommerce platform do I use? While most fraud
prevention solutions can integrate with open source
platforms (ex: Magento) many SMBs choose to have their
websites hosted by eCommerce platforms such as Shopify
or 3D Cart. With hosted platforms the fraud prevention
options are more limited as each fraud prevention solution
needs to build custom integration into the platform.
NoFraud
NoFraud is a full-service solution. AVS/CVV is built-in, it works in real-time, has a live cardholder verification team, and provides
merchants with white/black lists. Setup is a simple gateway URL change and pricing is transaction based. NoFraud is certified as
PCI compliant at the highest level.

expert interview
How Data Is
Transforming Payments
Nathan Trousdell is the Director of Strategy & Corporate
Development at Payvision, a global online payments processor
based in Amsterdam. He works with the founders and
department managers across all areas of the fi rm, including sales
strategy, data science and product. He is also responsible for
the valuation and analysis of strategic investments and merger
& acquisition activity. Prior to joining Payvision, Nathan worked
as an Investment Banker in London and Wellington. He has a
Bachelor of Commerce in Finance from The University of Otago,
and an NZX Diploma in Finance.
Nathan Trousdell
Director of Strategy &
Corporate Development,
Payvision
The emergence of Data Science
is gradually picked up also in
the Payments World. We talk
to Nathan from Payvision, a
company at the vanguard of driving the
importance and real value for customers
of data in Payments.
What do you think is the role of Data
Science in the Payments sector?
I think Data Science in the payments
sector is multifaceted, with fraud and
security being a large part of it on one
side, and the optimization of payment
processing on the other side. On the
fraud side, understanding fraud patterns
and trying to bring in obscure data that
may help you recognize and catch fraud
is incredibly powerful. You can also use
Data Science to help your merchant’s
process payments more effectively, by
diving into authorization and conversion
metrics and looking at card holder
patterns and motivations. Overall, Data
Science is helping payment companies
provide safer and more reliable payment
services to both merchants and their
consumers.
What role does Data Science play in
your firm’s strategy and day-to-day
operations?
It is an interesting area because in
the payments business you sit on a
huge amount of information. You have
live transactional flow, running into
the millions of transactions, and the
more data you can collect on these
transactions the better understanding
you can obtain about your customers
and about the process. At Payvision,
we work to make business decisions
based on a mix of data information
and intuition. Many businesses run on
gut feeling and experience, and while
this intuitive approach to business is
important you always back up your
decision making with fact and logic.
With so many human biases it’s vital
to look at data and understand the
full picture before making decisions.
We at Payvision are evangelists about
doing business this way and are quite
passionate about getting this approach
more and more into the DNA of our
company. We always work to educate
people in all departments about the
importance of data based decision
making, and how it can be leveraged to
improve the organizations performance.
Picking up the aspect of combining
intuitive and data based decision
making, do you think adopting to this
new environment is a big challenge?
It is definitely a learning curve and an
educational process. Proving the worth
of data through tangible results is
important because analyzing it, creating
reports and teaching people about how
it can help them serve our customers
better is time consuming and soaks up
resources. However, as I noted before,
I think that at Payvision we will never
solely rely only on data because there
is always a chance you can incorrectly
interpret it and act in blind faith. The
philosophy that inspires us is to always
have curious and critical mind, and be
skeptical of everything. It is easy to
make a mistake and suddenly lose the
value of the data and exercise that you
were going through, which needs to be
focused on solving real problems, not
creating new ones.

expert interview
There are numerous advantages
of using data within the Payments
sector. What are the disadvantages
in your opinion?
The only disadvantage is that it’s really
time and resource consuming. This is
because the market is highly fragmented
especially when you work with a lot of
partners, like we do, who may still use old
systems with different data sets, styles,
information management approaches.
To provide a seamless experience to
merchants and consumers, and enable
them to process and review payments
in all regions through a single system,
you need to take all of that differing data,
clean and consolidate it so it can be used
to provide real insights. This is a pretty
heavy exercise in terms of resourcing,
but we need to face this challenge
in order to provide the omnichannel
experience that is the future of
payments industry. To me, outside of
the resourcing issues, and the need to
continuously educate people who don’t
have a data-driven approach to problem
solving, there aren’t any disadvantages.
In the long run seeing past those shortterm
disadvantages allows you to reap
huge long-term benefits.
What is innovation in Data Science
for you?
Traditionally, innovation comes from
being frustrated by old-fashioned ways
of doing things, being curious about
how it could be done better and then
playing with the ideas that come out
of that process. Scientists, the chief
innovators in society, are themselves
people who constantly tinker and play
with things. To be innovative within
Data Science in the payments world you
need that curiosity. You need to look at
the payments experience from the
merchants and partners perspective,
as well as the consumer’s perspective.
You need to understand what problems
and frustrations they face, and how
looking at data in a curious way can
impact the problem solving process, and
provide new insights into behaviors and
motivations.
Do you see real-time analytics also as
an opportunity in Payments? In the
past companies used to base their
decisions on historical data. Now with
the technological advancement you
can get quality data out of real time
analytics.
Defi nitely! With traditional fi nancials,
when you do the monthly or quarterly
close the data comes from looking
back at historical information. However,
if you’re able to connect all your data
sets and systems together, you’re
able to build up a full fi nancial view
of the business based on real-time
transactional information. This real-time
information can serve the finance, sales
and management teams and give them
instant feedback on business trends.
Also, and this is incredibly important in
the payments industry, preventing fraud
relies on being able to act instantly to
cases of fraud before there is a negative
financial impact, so you have to be
running real-time on transactions. For us
moving all of our data systems to being
real-time is very high on the agenda of
all departments.
Data Scientist: The Sexiest Job of the 21st Century

expert interview
What are your expectations from
Data Science or how do you think
these expectations have evolved
over time, in the Payments sector
especially?
It is interesting because Data Science
is like UX and UI designers 5 years ago.
There weren’t many of them, nobody
really knew what they were doing but
they knew it was important. I think Data
Science is going through this discovery
phase recently too. You can now
study Data Science specific courses in
universities, when traditionally people
came from a computer, engineering,
math or physics background, or a
mix thereof. In general, Data Science
is maturing and by this I mean the
technology stacks and the systems
are evolving to a point where they can
be trusted and are widely used and
understood. In the recent years, there
were a lot of possibilities discovered
in payments, and people fi gured out
what data means to their company and
customers, and how to best leverage it.
Now it’s the time to push forward and
get the real benefits from it.
What is you vision where on the
future development of Data Science ?
I see a continuing improvement in
predictive and machine learning models
on conversion rates, fraud, and on the
optimization of whole omnichannel
strategy. There are plenty of areas
we’re looking into, and many of them
are sensitive and provide a competitive
advantage for our company, hence it’s
confidential.
As Director of Strategy, I will continue
to work together with my team in order
to provide our merchants, as well as
our own internal departments, with
special insights so that they can make
actionable changes in the areas they
didn’t even know could be improved.
I think this is what makes Data Science so
interesting; taking a journey of discovery
into areas you can already improve, and
areas that others haven’t even thought
about yet. It’s that curiosity that will
drive it into the future. Within payments,
people have many habitual patterns that
you can extract valuable insights from.
We like to think that we are all very
different, that we do things differently,
but the truth is that we all have many
predictable patterns. Our geo-spacial
habits, our spending habits, what we like
and don’t like etc. As we collect more
data on behavior the predictability of
such habits will become more reliable,
which will drive better decision-making
to serve customer needs.
What legal and regulatory challenges
do you face when utilizing the data?
What are the major hurdles in this
matter?
There are two parts. There are the
regulatory hurdles that we face and
Europe is definitely at the forefront in
protecting people data privacy, which
is great. The second part is about the
perception of collecting and using data.
How much do people want to give away
and expose their privacy? We are living
in a world where everything is being
tracked. 90% of the existent data was
collected in the last two years and I
expect that trend will continue. The
amount of data that is being stored is
growing rapidly, and people are not
comfortable with that – they feel it’s very
‘Big Brother’ and could be used against
them.
For example, if we were tracking
payments and looking to link it with a
person’s profile both online and offline,
then we need to be open about why we
are doing it, and have the certainty that
the person is protected and the use
of the data is positive. In such a case,
data could help us to understand what
payment methods the customers like to
use, where do they like to shop, what
kind of things do they like to buy. This
information could allow merchants to
provide the best deals to the customer
as well as the most frictionless and
seamless payment experience, both
online and in stores.
Awarded with “Best Acquirer” at MPE Berlin 2016 and ‘Best Merchant Acquirer/Processor’ at the 2015 Payments Awards, Payvision
is one of the fastest-growing global acquiring networks in the world. With over a decade’s presence in the global payments market,
Payvision has accrued vast knowledge of global acquiring and payments processing for the ecommerce market. Payvision simplifies
the complexity of cross-border ecommerce through a highly effective and secure transaction processing platform. By offering banks,
PSPs, ISOs and merchants one global acquiring platform, 24/7 support, 150+ transaction currencies, a high-end reporting interface
and a solid risk management solution, Payvision strives to support its customers in expanding their geographical footprints and
growing their business.
For further information, please contact:
Floriana Cristea
Global Communications Manager
E-mail: press@payvision.com; Web: www.payvision.com

The concept of connected living is giving
wearables a new lease of life: as a wallet.
by Jörn Leogrande
Advancing digitisation goes hand in hand with a boom in
wearables, as the significance of the Internet of Things shifts
beyond simply interacting with a smartphone touchscreen.
Secure identification and new forms of real-time communication
are at the core of payment processes using wearables.
Ever more people are now paying “on the go”. This trend can
above all be observed at public events: whether at the Eurovision
Song Contest in Stockholm or at the Olympic Games in Rio de
Janeiro, using wristbands and rings to pay for drinks and snacks
has become commonplace. Such technology demonstrates an
event’s innovative strength. There is one drawback: the reach
in these situations is restricted to the number of attendees. Can
wearables now find general appeal among the masses?
Yes, they can, as wearables are meeting more and more demands
placed on them by consumers, and the market’s growth rate is
high. According to the latest IHS Technology Market Overview,
the number of wearables which can be used for payments will
increase from 11.6 million units in 2015 to 135.2 million units in
2020. This will result in the yearly transaction volume increasing
from USD 1.9 billion to USD 252 billion.
This shows that in the future, wearables will be used for payments
more than ever before. Other functions and areas of application,
for example smart clothing and fitness tracking, will gain in
importance at the same time, with pharmaceutical companies in
particular testing the benefits of these. This will make it easier to
get a health check-up than it is to read emails. However, while the
value added services in this area have taken a back seat, there
is more potential to be explored in connection with the idea of
connected living.
Security takes priority – HCE technology provides the perfect
solution
What does this mean in concrete terms? In the future, our front
doors will unlock automatically if we begin to show symptoms of
a heart attack. If our body temperature rises too far, our fridge
will automatically pour us a glass of cold water. If we run out of
coffee, our espresso machine will order some more. Data security
is one of the most heavily discussed topics in connection with
the subject of connected living. However, this concern will likely
subside as experience of these technologies increases, allowing
the benefits of such solutions to come to the fore.
One way in which mobile payment solutions can be offered via
wearables is the use of host card emulation (HCE) technology.
This software-based solution facilitates secure contactless
transactions for payments and services in mobile applications. All
data generated during a transaction is no longer stored on a
hardware component, but instead transferred to a PCI-secured
served environment.
Encrypted card data is saved using cloud-based payment (HCE).
HCE relies on the near field communication (NFC) transmission
standard, which enables wireless transmission of data over short
distances. The wearable device communicates with an NFCenabled
payment terminal. This technology can be implemented
in existing wearables by way of a simple payment interface in the
form of a software development kit (SDK).
Pay by a flick of the wrist
Making a payment with a simple flick of the wrist was a fanciful
idea just a few years ago – but now, it is a reality. The mobile
lifestyle is impacting on our everyday lives: people are willing to
make payments on the move. Wearables with integrated payment
functionality are a reflection of this change. Leading innovators
such as Wirecard provide an integration platform which helps
retailers to offer the option of contactless payment via wearable.
Visit us at Booth 2216
About Author
Jörn Leogrande, Executive Vice President Mobile Services, Wirecard AG

Spotlight
You think you have what it takes to start a
business in a super-hot market?
PCM takes a close look at some of the most
innovative and promising startup companies in the
payment industry.

startup spotlight
“WE BELIEVE
IT’S A NOBLE
GOAL TO
HELP CHANGE
HAPPEN”
Jeremy Almond, Co-founder & CEO, Paystand
Many different financial
services have made big
gains over the last years.
Oftentimes those are mainly
focused on business-to-consumer
transactions. However, there is also
another immense market for payments
in the business-to-business (B2B) world.
To this day, B2B payments are known
to be inefficient and expensive. Paying
invoices or moving funds across borders
can be very costly for businesses and is
full of uncertainties.
We speak with Jeremy Almond, cofounder
and CEO of Paystand, a next
generation payment & eCommerce
checkout system enabling businesses
to handle their payments in a more
efficient manner and at lower costs.
Where did your idea for Paystand
originate?
At a very high level Paystand uses
modern Internet technology to
transform B2B payments. Today in the
U.S. about half of all payments are still
done via paper cheque.
In my particular background I have
spent a long time working with business
technology companies. And I’ve seen
them try ‘crazy things’ to get away from
paper cheques. They would sometimes
build some complicated business
processes on top of ACH or move over
to credit cards, which can get really
expensive. For example, when sending
a big invoice of $50.000 you might be
charged 3% just to get paid. On the
consumer side there is a lot of great
innovation going on with payments but
there really isn’t something yet that looks
like the modern Internet on the business
side. Something that is basically nearly
instant, very low cost, cross border and
also completely open. All the principles
you know the Internet to be. That’s
where the idea for Paystand came from.
We started building the software in 2013,
therefore, we are still a pretty young
company. But, we feel really blessed
since we’ve been growing very fast and
serving different companies from small
businesses to very large enterprises. We
just hope we can grow the business for
us as well as our customers. Our goal
is to make business payments adapt to
the Internet and modernize the process.
How would you define your company
culture?
For us as a tech company, our culture
is very much focused on innovation,
openness and fairness. All of those
things are partly what the Internet
stands for. Bringing these values both
to our team and our customers is a very
important task. We are very customer
centric and for that reason we also made
our business model very transparent.
Since we think the industry needs
transparency all of our team members
live and breath that attitude as well.
When thinking about innovation and
openness, our team members are very
passionate about what they do.
We think that improving financial services,
which are at the heart of our economic
system, is a meaningful purpose. Our
team members with years of experience
coming from either tech companies or
financial services backgrounds came to
this start-up because we think we can
actually improve the system.
What differentiates Paystand from
other payment gateways in the B2B
payments arena?
Basically our product is centered around
a model we call payment-as-a-service
platform. This concept adds value for
the business on top of seeing payments
only as a utility. To be more specific, we
mainly do three things that separate us
from other payment gateways.

startup Spotlight
First, we have a fairly flexible platform
that enables a business with their own
existing business process to layer us
into their website, their invoice or their
enterprise mobile application while
still maintaining full control of their
customer experience. When looking at
companies such as PayPal or Square,
these consumer facing companies seem
to move their business into one specific
flow. We can go behind the scenes
because we don’t think it’s our customer
but the business’ customer. Thus, we
treat this relationship very honorably.
Secondly, we have this very broad
technology platform that uses different
payment rails. When working with us,
businesses have the option to use an
electronic cash or an electronic cheque
system that are both very unique and
proprietary to Paystand. Additionally, we
also allow choice. Customers who want
to use a card for certain customers can
do so. They can use Paystand to have
a single point of reporting and a single
point of settlement. In case businesses
want to use a traditional card system for
some other customers for convenience
purposes they can do that as well.
Furthermore, if businesses want to work
with more innovative things around
digital cheques, bank to bank transfers
or electronic cash, Paystand offers that
option for their customers too. Paystand
provides the platform, which offers
many different pipes and the business
can choose which specifi c ones they
want to use. In the end we provide them
with all the tools which they can use to
their advantage.
The third and perhaps most interesting
thing Paystand is known for is that
its entire business model is different
from common players in payment
industry. We don’t make our profit
from transaction fees. Instead we
are a software company providing
software licenses and businesses can
use Paystand as much as they want.
Basically we give you 0 per cent network
fees that you can benefit from. If you use
our eCheque or eCash network, there
is no transaction percentage fees. This
is much more efficient for businesses
when they need to move large amounts
of money. Even if businesses want to use
the old system the costs are still going
to be dramatically lower since we give
people wholesale rates.
What are the key hurdles to grow
your business?
We believe to our core that payments
will go completely digital on the business
side. It’s going to take quite some time
though. We started Paystand as a longterm
company, one that can make an
impact by methodically serving our
customers. Looking at hurdles, today
we are currently only operating in the
U.S.. We want to serve these customers
well and make sure Paystand has
delivered the best customer experience
and solution possible. From a broader
perspective to grow, Paystand obviously
wants to operate on a global scale. For
that we must work with the regulators in
various different countries with different
sets of rules related to moving money in
a safe, compliant and secure manner. We
take the customer’s trust very carefully
and see that as a privilege and honor to
serve them in the best way.
What opportunities do you see in
the payments industry?
Looking at the opportunity in the
industry, we’ve been very early
proponents of blockchain. If you look
a year or two ago that was very much
the bleeding edge. Now we are starting
to see other financial services whether
they are banks, exchanges or remittance
focused companies starting to realize
that blockchain is transformative
technology. If considered thoughtfully,
we think the technology of blockchain
ledger is world changing. It does solve
real fi nancial problems but it will take
time to bleed out into the different part
of the system. When it does though it
will make the system more efficient. We
are really excited about that. To name a
few, for example settlement is very slow
today on the traditional rails and in the
U.S. ACH is very slow as well. Another
example is cross border transactions
today are very hard to execute and
they are expensive. With the blockchain
A snapshot of the Paystand team located in the Silicon Valley office.

startup spotlight
technology we think a number of financial
services can be more efficient than a lot
of the existing legacy infrastructures. So
we want to apply the new technology
in such ways to enable businesses to
pay each other, so that their fi nancial
systems can settle to each other and
ultimately make the system more open
and more effi cient. However, fi nding
the appropriate balance between the
secure and insecure elements will take
some time for some financial companies.
But we pay a lot of attention to building
trust and security measures to drive this
innovation.
Are you currently working on any
exciting projects within Paystand?
Over the next twelve months, we will
start selectively thinking about what
other countries can we serve outside
the U.S. Being able to provide and
operate something that works well in
other countries is important to us. There
are vastly different payment systems
in different countries so that’s why we
are pretty excited about innovative
technology like blockchain that can help
to unify the systems.
More recently we are working on
releasing a new feature of our eCheque
product, which is one of our most used
facet of our product platform. This
feature will enable direct bank transfers
to more than 15.000 banks. Today we
serve approximately 80% of all the banks
in the U.S. and with this release we’ll
have direct bank payments to 15.000
banks, which is about 98% of all banks in
the U.S. We are really excited about this
in particular for our eCheque product
because it means that our direct bank
transfer has a lot of the benefits of card
payments. To be more specific, it allows
fast settlement, the ability to do fund
verifications as well as the option to do
identity verifi cations. In the U.S. none
of those exist on the traditional ACH
payment.
Since the traditional ACH payment
system is fairly antiquated technology.
Our eCheque product can offer the
same low cost structure of a cheque
but at the same time have all the digital
advantages of card payment. Being able
to offer this with almost all the banks in
the U.S. is very exciting for us.
“Get paid faster with the world’s first B2B payment
network designed for today’s Internet”

SPECIAL FEATURE
Pour App Origins: An
Interview with Jordan
Pour is an app launched by a team working from San
Francisco and Amsterdam. Pour allows users to get
rewards for taking selfies with favorite brands in 3
easy steps. Users choose available campaigns on the
app’s list or check them on the map, take selfie at sponsored
location and then the brand logo is placed to the photo
automatically. Once the the selfie is shared on Facebook,
Instagram or Twitter, the user receives cash.
With their technology, Pour delivers transformative marketing
solutions to brands, hotel and restaurant chains, and
companies from other industries looking to deliver extremely
engaging new customer experiences. Integrating Pour logo
placing and a publishing solution in applications can help
invigorate a customer base, accelerate them towards loyalty,
and expand a fanbase through social media. All this helps
drive new revenue streams.
PCM: How did your idea for the company originate?
Jordan: Well, I was traveling and staying on a small island, Isla
Coronero and I spoke with the owner of a beautiful hotel there
named Ilya Evans. People were taking photos outside his hotel
because of the beautiful scenery and he said “I wish there was
some way that everyone who took a photo could place my
hotel’s logo on it first before sharing”. And I thought, well let’s
make that. It’s a great idea. At first we explored using loyalty
points, but we thought about and it and why not pay people
money? Cash over coupons is working really well. There’s a
psychological connection between receiving cash that’s more
powerful than free things or points.
PCM: What is your mission and vision?
Jordan: Well we think it would be great if we become a source
of income for everyday people, especially those traveling the
world on a budget. Here’s the way we see it: everyone can
be an influencer. Normal people can focus on a brand they
love and they do have infl uence. When you’re sharing and
you’re an average person, that’s who is also spending money.
Not an “influencer” who spends all day creating these curated
artificial images for content. We want to change the influencer
market — and make it so that anyone can do this.
PCM: What is your product/service that makes you
different that others in the space?
Jordan: We want to create benefits for advertising for everyday
people. Anyone can spread the use of this app, and in that way
it’s innovative. The product we have is giving people this option
to make cash for their images they’ve created. With our app,
the user becomes the content creator for the advertisement
and this makes it more attractive to their friends. Using Pour
is also a way of bypassing traditional advertising that is being
ignored because of technologies like ad blocker
Eventually, we are looking to create a Pour wallet. Travelers
could use it, share it and set it up at no cost. They could
take money directly from the app and place it in their wallet
account, pay each other with it, etc.
PCM: What kind of year do you foresee for the company?
Jordan: We started in January and have worked on our backend
development to create a product that is now usable and on
the market. We have a few clients and are growing. In the next
year, I see this wallet developing. We have a team that includes
members with significant payment knowledge so we’re excited
to continue growing from here.
PCM: What are the key hurdles for growing your business
in the coming years?
Jordan: Well, competition of course. And we need to keep this
appealing and make sure the people we design it for continue
to use it and enjoy it.

SPECIAL FEATURE
PCM: Any exciting news you would like to share with our
network?
Jordan: Yes, actually. We are about to sign with a very large
hotel chain that is based in Asia and has a growing presence
in the EU. This means working with two markets. Our app
creates economic empowerment for our users, especially
those in an emerging market where this cash will go far. Plus,
for our partners this is an amazing way to run a campaign.
Think about it: you get to feel out an emerging market with
potential buyers, find out how your product is going to do and
set up a successful campaign, all at a low cost.
Additionally, when a brand is giving out cash payments to users
in their target demographic then it increases brand loyalty.
Many who participated in the campaign are likely to continue
using that brand or looking to purchase it afterwards because
of the emotional connection created between the brand and
the user as the user creates content and collaborates with
the brand.
One more great thing we can do with Pour is develop
connections with partners and charities. In terms of
philanthropy, this would empower people to contribute. Say
there is a natural disaster. Partners or everyday people can
create a physical site where cash payment is available in the
area once a photo is taken. This means people near where the
disaster happened can find a way to finance themselves in a
time of hardship and the message about raising awareness will
be spread via social media, which can lead to more funding.
Partners could also have the option to donate or match user
donations. This creates a really positive relationship between
brands, consumers and users of the app, all working towards
a common philanthropic goal.

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